The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.'
Ronald Reagan
The State of the Union Address: A Critique
The first thing that struck me was the muted tone of and reaction to the speech; the speech fell flat. You did get the obligatory standing ovation to the obligatory reference of the sacrifice of our troops overseas. The Democrats did whoop it up when it came to hailing the new health care entitlement.
The President clearly is trying to set up the Republicans to assume a co-equal share of the responsibility, even though the Republicans only control the House. He didn't really signal any flexibility; for example, the only flexibility he shows on health care is the concept of medical malpractice reform. In fact, he tossed out the same bone last year. Instead, he's still selling things like guaranteed acceptance and putting adult children on household policies; the latter is going to push up policy costs assuming adult children use medical services. It is simply better to isolate high-cost patients needing subsidized care into high risk pools; you cannot force a business to service money-losing customers from day 1: it's unconstitutional. The best way to spread risk across the population is through some universal (e.g., national sales) tax or maybe a tax on health care charges/insurance premiums.
He put in several plugs for his initiatives--making much ado, for instance, over the repeal of don't ask, don't tell as allowing gays to serve (but, in fact, DADT did allow gays to serve); his stimulus spending for solar rooftop tiles (but not the fact a Massachusetts solar company is shifting its panel manufacturing to China); his nationalization of student loans (while ignoring, like federal subsidies exacerbated the housing bubble, it only makes the taxpayer vulnerable to pricey college loan defaults in an industry in which it has no distinctive competencies); his pushing-on-a-string consumer protection financial deregulation, etc. He once again vowed not to make the Bush tax cuts permanent for high-income taxpayers. He's still pushing his high-speed rail initiative as if the business case was self-evident (which it's not). He is still in a state of denial about our economy's vulnerability to oil supply shock and an overemphasis on consumption (both of which are exacerbating our trade imbalance and currency security); in fact, he explicitly linked eliminating subsidies for oil to green energy subsidies. (Let me be clear: cut subsidies, but use the savings to reduce the debt.)
I do not like the President's metaphor of the current economic milieu being our Sputnik moment: we need to respond to the challenge of other nations' exports of manufactured items, to our middling educational achievement scores, etc. First of all, the Americans were not really caught flat-footed or by surprise; America started its own ICBM program in 1945, and in 1955 both the US and USSR, within days of each other, announced goals of launching a satellite into space by 1958. The USSR did launch its Sputnik I in October 1957, and the US followed with Explorer 1 in January 1958. (However, it should be noted that President Eisenhower, worried about international reactions to an American satellite passing over USSR air space or how the satellite was launched into space, passed on an opportunity to put a satellite in orbit in 1956. I could very easily see a President Obama back then, given his obsession with diplomatic standing, echoing the same concerns.) The ARPA/NASA response, with separate missions, was already well under way before President Kennedy's iconic goal to land a man on the man.
But economic challenges to America had been made far before the rise of China and India; for instance, Germany (with 82 million people, i.e., with less than a third of America's population) exports more. It's not just a matter of income levels; gross per capita income of multiple European nations exceeds America's. When I was earning my graduate business degrees in the 1980's, a number of American students were learning Japanese, as companies from east Asia launched formidable challenges in automobiles and electronics; at the time, W. Edwards Deming's quality control ideas were readily implemented by Japanese challengers. We only need to change the names of the parties; China and India's scientists and engineers are able to compete very efficiently given cheap computer hardware and the Internet.
One of the reasons I don't like the Sputnik example is that I think Obama is using it to justify progressive interventions in the free market. In fact, what is impacting company investment in American factories and jobs is a tax structure which is uncompetitive and high regulations and mandates. Now I give Obama credit for addressing lower business tax rates and certain regulation overkill--specifically the $600 health care expenditure paperwork required by the new health care bill. But notice how there was really nothing new in anything he said here--and he qualified everything. So he's willing to consider lowering the corporate tax rate--but really only in the sense he makes up for the loss of income through the elimination of various deductions or exceptions. This, of course, totally ignores the fact that lower tax rates stimulate additional economic activity.
HALF-MEASURES, HALF-MEASURES, HALF-MEASURES: I predicted it. He paid lip service to the deficit--but not REAL cuts: only limits like a temporary freeze in pay or expenditure levels. Remember how many times he's dismissed earmarks as simply a fraction of a percent in spending? But he raised the point tonight--knowing full well that the Republicans in each house already ruled out earmarks. He's willing to discuss changes in health care--but ONLY if they are consistent with his goals of expanding coverage or improving quality. He tried to sell changes for hundreds of billions over a decade--knowing full well that amounts to single-digit percentages of his $1.4-plus trillion deficits PER YEAR. He briefly mentioned social security--but made it clear that partial privatization of employee contributions was NOT an option. He's for cutting deficits--but not on the backs of people whom benefit from government programs... He says he objects to some (unidentified) conclusions from the bipartisan deficit cut commission, but barely touches on the fact that nearly half the federal expenditures are entitlements like Medicare and social security. He talks about FREEZING domestic programs and CUTS of defense spending.
He just doesn't understand how his economic goals or policies are intrinsically inconsistent: he wants the economy to produce more things--but he spent time talking about the need to hire more math, science, technology and engineering teachers: not nearly as much time on increasing the pipeline and production of professional scientists and engineers. He talks about the middling performance of students, but then rallies the Congress to cheer for the sake of all those "underpaid" ineffective teachers...
He did push some themes I liked: streamlining federal agencies; tax simplification; more trade deals; legal immigration reform (foreign college students); regulatory reform; malpractice reform; etc.
Tough Questions for a Libertarian-Conservative
If a principled libertarian took a look at my posts, he or she would quickly find problems with a number of my opinions--for example, my pro-life and anti-drug positions. Take, for instance, the question of drug legalization. Libertarians argue the classification of drugs is arbitrary, the black market can be dangerous and expensive, and it creates a vicious circle of crime as people look to finance illegal goods. There are a number of things I would say in response. For one thing, drug transactions are subject to supply and demand: a high price has an effect on demand. Second, there will always be transactions outside a legal exchange (e.g., participants may want to purchase stronger stuff, without any taxes or anonymously). Third, it is difficult to assess costs and risks, e.g., effects on the family and public safety, susceptibility to addiction, lost productivity, physiological changes in the brain, treatment facilities, etc. I've never used myself; I'm not attempting to pass judgment on those whom experiment, and I think other people have a right to live their own lives, and make their own mistakes (so long as they acknowledge responsibility for their actions). I'm more concerned about the pusher, whom I hold at least partially responsible for what his customers do under the influence or what happens to them.
Abortion is a very tough question; in fact, libertarian Ron Paul, a physician, opposes abortion. A baby's life begins at conception; he or she is biologically distinct from the mother. I would hope that the mother makes the correct moral decision. To a certain sense, I would have to ask myself--what if I met a mother beating her 6-month child... If I cannot speak out for a child's life, who will speak for my own?
Abortionist Kermit Gosnell was arrested last week for the deaths of an abortion patient and 7 "born alive" infants whom were killed by scissors. President Barack Obama, who stonewalled a born-alive infant protection act as a state senator, used the anniversary of Roe v Wade to reaffirm his support for a woman's legal right to have her child aborted. What should have been ideally a rare occurrence by some accounts has led to 50 million deaths involving overall nearly one of every 3 American women.
Political Humor
Police in Austria are looking for a bank robber who wears a Barack Obama mask while committing robberies. He started out with a Sarah Palin mask, but no one took him seriously. - Jay Leno
[That's because he had to wait in line to get to the teller's window, and he gave up two-thirds of the way through the line...]
A few originals:
- Recently convicted 93-year-old John "Sonny" Franzese, an alleged mobster, had been difficult to arrest. Detectives had tailed him to an ice cream parlor in the middle of winter. He had placed his coat on a chair and headed for the restroom. Detectives became suspicious when he never returned to his seat. You would have figured that they had learned their lesson after he had earlier gone into that hotel room with a 20-year-old hooker, whom left 4 hours later...
- Majority Leader Eric Cantor was disappointed that Minority Leader Nancy Pelosi chose another Republican (Rep. Bartlett (R-MD)) to go to the State of the Union address. Barney Frank (D-MA) subsequently found Eric another nice Jewish man to go with: Steve Cohen (D-TN).
Musical Interlude: One-Hit Wonders/Instrumentals
Herb Alpert & the Tijuana Brass, "A Taste of Honey". Does it get any better than this?
